Efficiency studies

We have knowledge and experience in all aspects of the quantitative analysis of operating efficiency issues, and in the setting of efficiency improvement assumptions or targets in the context of a price control review.

Reckon's staff have a track record of providing expert advice on the use of cross-industry comparisons and of total factor productivity measures to estimate the potential for general efficiency improvements in a sector, and on econometric and programming techniques to assess relative efficiency and to inform efficiency catch-up assumptions for individual companies.

We are familiar with all the main relevant techniques, their strengths and weaknesses, their applicability to the data available in particular industries, and the interactions between them.

In selecting an appropriate approach for each case, we combine our experience of what works in practice with a rigorous theoretical analysis of the nature, significance and direction of the potential biases which affect each candidate technique.

This recognises the inherent limitations of the information available on how performance improvements are made, and provides a robust basis for choosing between approaches (e.g. top-down or bottom-up analysis) and/or for combining their results to answer price control questions.